Monday 15 April 2024

Finance Investment Movement 44

I met a friend whose job is to monitor global properties and be involved in his company's decision on whether to invest eventually. It's a national topic of interest and our conversation started and ended without mentioning Singapore in between. So where's his radar pointing towards? First off, we agreed to write off China in the short term as the domestic economy is in a heap of trouble. Next, he felt that Australia's valuation was too high and couldn't justify capital yield returns. The focus moved to Europe and due to its expansive landscape, we spoke mainly on two countries. Germany is a no go. It had missed the opportunity to ride ahead of its neighbours. Since Brexit, this was the place where many financial headquarters were supposed to relocate but didn't materialize. Covid dealt a further blow where the tourist and exhibition sectors got hit hard and still not recovered yet. The car industry, where the Germans are arguably the continental kings, had fallen behind the electric vehicle trend. The top brands were out-competed by the Chinese and Japanese. Unless there's a drastic cut in production costs, it's difficult to see how Das Auto can retaliate effectively. What's left in Europe then is England. The economy is generally seen to be chugging nicely, the Pound is weak and the education industry could always depend on that few branded names. Therefore, it was concluded that London is an investible place and specifically only in student accommodation. Finally, my friend gave a vote of confidence to Japan as well, mainly because the Yen is very attractive and a property asset can be used as a hedge against inflation while borrowing cost will remain low for quite some time.

It so happened that I was asked to go look at industrial property in Johor as my company thought about moving to save cost. To my surprise, prices have increased at least double from my last recollection. Swathes of land were being cleared and there seem a buzz in the area. I met a few agents and the information collaborated. Maybe the Agong effect is about to be showcased.

Tip: Mondot 2019, bushwood with flowers, wakes slowly then presents a medium bodied bouquet

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